BRUSSELS (Reuters) - Trapping and burying carbon dioxide from power
plants could become viable without public funding by 2030, helping
nations reduce their dependence on energy imports and meet climate
goals, a report said on Monday.

But that could happen only if obstacles to the technology are
removed and polluters are forced to pay more to emit CO2 in cap and
trade schemes, it added.

Carbon capture and storage (CCS) is seen by industry as a potential
silver bullet to curb emissions from coal-fired power plants, which are
multiplying rapidly in India and China, threatening to heat the
atmosphere to dangerous levels.

Companies are working on cutting-edge technology to trap CO2 and
pump it into empty gas fields and deep underground caverns, but
utilities are reluctant to use the process as it adds about 1 billion
euros ($1.42 billion) to the cost of each power plant.

The European Union wants up to 12 demonstration plants by 2015 in
the hope they will find ways of cutting future costs. EU sources say
the bloc is close to agreeing billions of euros of public funding to
kick-start the pilot projects.

Once it has built momentum and been properly developed, the cost of
burying CO2 could fall to 30-45 euros per tonne by 2030, said the
report by consultancy McKinsey and Co.

"Costs at these levels would make CCS installations economically
self-sustaining at a carbon price of 30-48 euros per tonne," it added,
referring to the price of permits to emit CO2 under the EU's flagship
Emission Trading Scheme (ETS).

The ETS caps how much CO2 industries may emit and establishes a system for trading in emissions permits.

The price of carbon being traded in the scheme on Monday was around
25 euros, for December delivery, but the report cited five studies by
financial institutions that forecast prices would rise significantly by
2030.

"On the one hand, (CCS) could provide greater energy security by
making the burning of Europe's abundant coal more environmentally
acceptable, and so reducing the dependency on imported natural gas,"
the report said.

"On the other, it could potentially improve the environmental impact
of new energy forms such as electric cars and hydrogen, which could be
produced with CCS-based electricity," it added.